Vedanta Group's Stock With Strong ROE 122.28% Hot To Add In Portfolio; All-Time Gains 40,059%

Antique Stock Broking:

Hindustan Zinc's (HZ) standalone revenue rose by 17% YoY and 4% QoQ to INR 85.6 bn (8% above our estimate and 5% higher than consensus). It was aided by higher zinc and silver prices and INR depreciation marginally offset by lower metal volumes and lead prices. EBITDA at INR 44.6 bn grew by 27% YoY and 9% sequentially (broadly in line with our and consensus estimates). The cost of zinc metal production, excluding royalty, declined by 3.5% YoY and 1.9% QoQ in INR terms to INR 87,960 per ton.

Adjusted PAT at INR 26.5 bn rose by 30% YoY and 11% QoQ. Plans are underway to raise the metal concentrate capacity to 2 mtpa over the medium term while 160 ktpa Debari roaster and debottlenecking initiatives would raise refined metal capacity to 1.2 mtpa by FY26. We maintain our TP of INR 451 at a target multiple of 7.3x FY27E EV/EBITDA. We retain HOLD rating as valuations are rich (currently trading at 8.4x FY27 EV/EBITDA) and we would prefer attractive entry levels.